Euro Area Inflation and EUR/USD Analysis - July 2026

Key Economic Data

On July 31, 2026, Eurostat released the inflation data for the Euro Area, indicating a rise in core inflation. The Eurozone Core Consumer Price Index (CPI) year-over-year flash estimate came in at 2.5%, surpassing the forecast of 2.4% and matching the previous month's figure. The overall Eurozone CPI year-over-year flash estimate was reported at 2.9%, aligning with expectations but slightly up from 2.8% in June.

Inflation Dynamics

The increase in inflation is primarily driven by energy prices, which surged by 10% from the previous month's 8.5%. In contrast, the food, alcohol, and tobacco category saw a deceleration in inflation, dropping from 1.5% to 1.2%. Services inflation remained stable at 3.3%, slightly up from 3.2%.

Technical Analysis of EUR/USD

The EUR/USD currency pair is currently trading at 1.14856, reflecting a -0.32% change. Following a recent peak, the pair maintains a strong bullish posture, consolidating near 1.1516 and remaining above key moving averages (10-EMA at 1.1515 and 30-EMA at 1.1498). The Relative Strength Index (RSI) is at 58.3, indicating solid upward momentum.

A decisive push above the 1.1530 resistance level is crucial for further bullish gains. Conversely, a pullback below 1.1500 could lead to a retest of the 0.0% Fibonacci support at 1.1483, followed by the 100-EMA near 1.1447.

Market Overview

As of July 31, 2026, European equities have reached three-week highs, while Apple shares dipped in the US premarket. The market is also reacting to recent Federal Reserve meetings, with expectations for rate hikes being scaled back.